Hiring Practices (Encyclopedia of Business)
When companies require new employees either because of expansion or employee turnover, they undertake a process of identifying the positions available and the skills needed to fill them. Next, companies launch any number of recruiting campaigns: placing newspaper advertisements, soliciting referrals from colleagues and employees, conducting job fairs, etc. After this step, employers interview applicants they feel are best suited for the positions available and they begin the selection process after conducting interviews. If needed, companies may interview applicants several times to ensure they select the most qualified candidates. All these steps make up the hiring process, through which employers identify and fill job openings.
JOB DESCRIPTIONS AND OTHER HIRING FACTORS
At the heart of the hiring process lies the need for a company to obtain additional workers to perform a certain task or series of tasks within the organization. The job description or job specification delineates the characteristics of the position available. Job descriptions include known duties and responsibilities, required education and experience, salary and benefits, as well as information regarding the work environment, growth potential, and expected performance level. Helpful details make clear required travel, the normal work schedule, general physical conditions, geographic location, union status, bonuses, and any other information directly pertinent to the job. Since employers rely on clear and concise job descriptions and specifications to construct advertising and to effectively use other recruitment channels, detailed job descriptions provide employers with essential information for use in locating applicants.
In addition to the job description, other key factors affect the hiring process. Corporate employment policies and plans, environmental conditions, and money or budgetary constraints are primary considerations. Current issues and trends in the workplace and population also significantly affect recruiting practices. Within a company, specific plans and policies regarding hiring are often in place. For example, companies with internal promotion policies prefer to use in-house employees when possible. This policy affects the strategy and tactics of an employer when locating potential applicants for the job. Likewise, policies that address company wide compensation and salary levels, preferences for full-time or part time employees, and restrictions on international hiring also figure into the employer's plan of action. Some human resource plans reflect desired personnel staffing levels. For example, affirmative action plans reflect ideal demographic mixtures that guide and direct recruiting activities.
Environmental factors such as the economic and legal conditions of the current environment also affect recruitment. High costs of living and inflation hinder hiring efforts when salary constraints are inflexible. High or low unemploynment rates, both locally and nationally, may also affect hiring activities. Legal requirements, too, influence the hiring process in a variety of ways. The Fair Labor Standards Act of 1938 specifies minimum wage requirements and child labor restrictions. The Immigration Reform and Control Act addresses illegal aliens and their employment. The Americans with Disabilities Act outlines employment requirements for workers defined as disabled. And, the National Labor Relations Act details employment issues and union status. These federal laws, in conjunction with applicable state and local laws, require employers to conform to prescribed expectations and actions in the hiring process.
Finally, costs and incentives may limit or expand hiring options and activities. Costs have a direct effect as in the case of a newspaper advertising rate or the overall cost of an actual hire. Employers take action and make decisions within a limited budget. Incentives or inducements allow employers to attract a higher quality or higher volume of potential applicants. Fast-food companies such as McDonald's or Burger King offer educational incentives to encourage youths to apply and stay employed with a particular chain. Eastman Kodak Co. offers a similar incentive called Kodak Scholars. Others offer child care or elder care services. Apple Computer, Inc. provides an on-site day-care center, while Johnson & Johnson coordinates referrals and placements in a local day-care provider. Effective inducements of this nature are a direct result of a changing workforce and workplace.
Employers identify potential applicants by receiving unsolicited application materials or by receiving solicited application materials in response to job announcements targeted at various recruitment sources. Unsolicited applicants enter the application process randomly. Solicited application methods are more controlled and require proactive invitation via a recruitment source. Employer sources, referral sources, and institutional sources are all methods employed used to solicit applications.
Employer sources include both employee referral channels and advertising. Employee referral systems can quite successfully extend the applicant pool without direct cost and attract applicants with potentially similar work habits and ethics. It can also lead to a homogenous work environment when overused or abused. Advertising offers another traditional method of soliciting job applications. The most common type of advertising is the help-wanted ad. Targeting help-wanted ads to appropriate publications commonly increases response rate. Display advertisements can sometimes increase response rates, as well.
Referral sources such as state employment agencies, private placement firms, and professional search firms use banks of job applicants to identify potential referrals. While the state employment office agency, often called the unemployment office, aids applicants and businesses without a fee, private placement firms and professional search firms charge varying fees.
Institutional sources comprise agencies such as schools, professional associations, labor associations, military units, and governmental agencies. Each offers a more specialized and focused channel to reach potentially qualified applicants. Recruiting at colleges and universities is a long standing tradition that has waned in recent years due to costs and difficulties in mapping job requirements to academic preparation. Professional associations and their publications present another means of reaching highly qualified and specialized applicants. Other institutions such as labor, the military, and municipalities serve as valuable resources in identifying recruits. In one example, the Job Training Partnership Act of 1982 provided funds and programs for local communities to create institutional sources as necessary. These communities and programs offer yet another means of identifying potential job applicants.
Other sources for recruitment include departing employees, job fairs, open houses, direct mail, and the Internet. Departing employees can often provide recommendations while job fairs and open houses act as valuable arenas for the marketing of employment opportunities.
The Internet emerged as a method of recruiting in the mid-to-late 1990s, although it failed to become an instant success. Rather, technology firms made up the predominate Web recruiters, whereas many other industries tended to rely on traditional methods. The William Olsten Center for Workforce Strategies reports that only I percent of new workers obtained their jobs by responding to solicitations on the Internet. With technology firms, the percentage was a little higher: 4 percent of all new employees obtained their jobs as a result of Web recruiting. Nevertheless, the William Olsten Center expects Internet-based recruiting to increase as more people and businesses connect to the Internet on a regular basis.
Furthermore, according to the study by the William Olsten Centerhich surveyed 600 businessesompanies generally used a combination of methods to expand their company rosters: 88 percent used classified ads, 72 percent used employee referrals, and 60 percent used temporary employment agencies.
Applicants in the hiring process complete an application form to signal interest in employment with a particular company. There are several common elements to an application form. First, personal data such as name and address are required to uniquely identify applicants. Questions to identify an applicant's sex or race or other non-job related information are discriminatory and prohibited. Application forms also request a minimum of information on education and skills, work history, and references. Education and skills information indicates the applicant's formal schooling and skill inventory. Work history documents previous employers, periods of employment, and job descriptions. Military experience may be addressed in a separate category to aid in the identification of preferential veteran's status. Awards and honors may provide additional pertinent insight into an applicant's abilities. References detail other people willing to discuss the applicant's skills, abilities, and experiences. A signature certifies the accuracy of the form's contents.
Application forms extend and reinforce the recruiting activities of the organization in both function and design. The functions of an application form are to aid in preselection sifting, gather data for reporting requirements, and build a resource file for future vacancies. Application forms that are well-designed graphically and easy to complete expedite the application process. Some companies, such as Pinkerton, also require the completion of an honesty questionnaire to supplement the application form.
For employers to attract employees successfully, they must remain abreast of the makeup of and the changes in the workforce and applicant pool. Consequently, they must monitor the demographics of the employable population in order to effectively market their jobs and select new workers.
The workforce and the workplace change in response to demographic, social, and economic changes. Recently, more women, minorities, and aging workers have entered the workforce, while the workplace has reflected an increase in professional, technical, service, and sales jobs and a decrease in manufacturing and agricultural jobs. Combined, these trends have led to fewer qualified applicants, fewer traditional candidates, and more candidates with different motivational needs. The changing workforce and workplace challenge employers to respond with effective strategies.
Demographically, aging workers represent a significant portion of the employable population. In the last hundred years, the portion of the population over age 65 rose from 4 percent to 12 percent. Furthermore, in conjunction with the Americans with Disabilities Act, disabled persons emerged as an employable category that had often been ignored previously. Persons with disabilities represent a strong demographic pool in recruitment since, by some estimates, almost 68 percent of this pool of applicants are considered employable. Women and minorities also continue to increase their numbers in the overall workforce.
In addition, some workers seek only part-time jobs or flexible schedules, which employers must take into consideration to avoid alienating this segment of the employable population. Many seniors or youths, for example, are interested in working only part-time. By offering part-time jobs and flexible schedules such as job sharing, compressed work week, and flextime, employers can accommodate individual preference while often cutting costs stemming from employee turnover.
After establishing job descriptions, recruiting applicants, and interviewing applicants, companies continue narrowing down the number of candidates and focusing in on the candidates they believe will fill the positions the best. While some employers will rely on subjective criteria and impressions, employers who want to avoid future problems associated with ineffectual hiring techniques will select employees based on objective criteria designed to match the right candidates with the openings. Generally, employers use applicant self-assessments, direct observation, and work samples to make their selections.
Employers elicit self-assessments from candidates through applications and resumes and especially through interviews. Companies question applicants about their experience, skills, and accomplishments during interviews in an effort to determine candidates' strengths for the job openings. Since applicants generally avoid disclosing negative information, however, employers must recognize the limitations of applicant self-assessments and supplement this information with direct observation and work samples if possible.
Direct observation, while difficult to obtain in many cases, provides clear evidence of an applicant's skills or lack of skills and facilitates the evaluation of applicants. Because companies do not want to risk having applicants perform tasks directly related to the companies' operations if they are not sure of the applicants' skills to begin with, the companies often observe applicants' performances on tests designed to measure aptitude for a given job. These tests may ask applicants how they would handle hypothetical situations or solve hypothetical problems, or the tests may ask applicants to complete practice tasks. For example, a company seeking a secretary might administer a typing test or have the applicant type a hypothetical report or letter.
Work samples when available provide employers with solid evidence for assessing applicants' aptitudes for a job. Employers may request work samples from applicants for various skilled or artistic positions such as photographers, graphic designers, writers, and copywriters.
Once employers have gathered this information, they begin to determine which candidates possess the skills necessary to fill the positions available. To make these decisions successfully, employers rely on the job descriptions they developed at the outset of the hiring process. Employers evaluate how well candidates meet the job descriptions as well as how they compare with other applicants. Beyond job specific skills, employers also evaluate applicants' communication skills, intelligence, leadership, motivation, and cooperativeness.
SEE ALSO: Employment Services
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